B-226641, JUN 5, 1987, OFFICE OF GENERAL COUNSEL
Highlights
CIVILIAN PERSONNEL - COMPENSATION - OCCUPATIONAL ILLNESSES/INJURIES - HEALTH INSURANCE - BENEFITS DETERMINATION - PRIVATE DISPUTES DIGEST: AN EMPLOYEE OF THE FEDERAL BUREAU OF INVESTIGATION BECAME TOTALLY DISABLED AS THE RESULT OF A WORK-RELATED INJURY BUT WAS DENIED BENEFITS UNDER A PRIVATELY ADMINISTERED INSURANCE POLICY HE HAD PURCHASED THROUGH DISCRETIONARY ALLOTMENTS OF PAY UNDER 5 U.S.C. 5525 (1982). WE ADVISE THE INTERESTED SENATOR THAT THE EMPLOYEE'S ONLY RECOURSE IS TO PURSUE HIS CLAIM AGAINST THE INSURER. HE WAS MEDICALLY DETERMINED TO BE TOTALLY DISABLED ON AUGUST 27. THIS APPLICATION WAS APPROVED IN JULY 1986. THE CONNECTICUT INSURANCE DEPARTMENT IS CONTINUING TO INVESTIGATE MR.
B-226641, JUN 5, 1987, OFFICE OF GENERAL COUNSEL
CIVILIAN PERSONNEL - COMPENSATION - OCCUPATIONAL ILLNESSES/INJURIES - HEALTH INSURANCE - BENEFITS DETERMINATION - PRIVATE DISPUTES DIGEST: AN EMPLOYEE OF THE FEDERAL BUREAU OF INVESTIGATION BECAME TOTALLY DISABLED AS THE RESULT OF A WORK-RELATED INJURY BUT WAS DENIED BENEFITS UNDER A PRIVATELY ADMINISTERED INSURANCE POLICY HE HAD PURCHASED THROUGH DISCRETIONARY ALLOTMENTS OF PAY UNDER 5 U.S.C. 5525 (1982). WE ADVISE THE INTERESTED SENATOR THAT THE EMPLOYEE'S ONLY RECOURSE IS TO PURSUE HIS CLAIM AGAINST THE INSURER, BECAUSE REGULATIONS IMPLEMENTING 5 U.S.C. 5525 INDICATE THAT DISPUTES ARISING FROM DISCRETIONARY ALLOTMENTS MUST BE RESOLVED BY THE EMPLOYEE AND THE INSTITUTION RECEIVING THE ALLOTMENT WITHOUT INTERVENTION BY THE GOVERNMENT.
THE HONORABLE LOWELL WEICKER, JR.:
THIS RESPONDS TO YOUR LETTER OF MARCH 19, 1987, ON BEHALF OF YOUR CONSTITUENT, MR. ROGER M. BUNDY, A SPECIAL AGENT OF THE FEDERAL BUREAU OF INVESTIGATION (FBI). IN YOUR LETTER, YOU REQUEST OUR ADVICE CONCERNING MR. BUNDY'S CLAIM FOR DISABILITY BENEFITS UNDER A PRIVATELY ADMINISTERED INSURANCE POLICY WHICH HE PURCHASED THROUGH PAYROLL DEDUCTIONS.
MR. BUNDY STATES THAT HE SUSTAINED A WORK-RELATED INJURY ON MARCH 13, 1979, AND THAT, ALTHOUGH HE CONTINUED TO WORK FOR SOME TIME, HE WAS MEDICALLY DETERMINED TO BE TOTALLY DISABLED ON AUGUST 27, 1985. MR. BUNDY FILED AN APPLICATION FOR WORKERS' COMPENSATION BENEFITS WITH THE DEPARTMENT OF LABOR, AND THIS APPLICATION WAS APPROVED IN JULY 1986. SEPTEMBER 1986, MR. BUNDY APPLIED FOR TOTAL DISABILITY BENEFITS UNDER AN ACCIDENTAL DEATH AND DISMEMBERMENT POLICY HE HAD PURCHASED THROUGH PAYROLL DEDUCTIONS. APPARENTLY, AMEX LIFE ASSURANCE COMPANY, THE INSURANCE UNDERWRITER, AND WRIGHT & CO., THE ADMINISTRATOR, DENIED MR. BUNDY'S CLAIM ON THE BASIS OF A CERTIFICATE OF INSURANCE WHICH ALLOWS BENEFITS ONLY IN THE EVENT THAT TOTAL DISABILITY OCCURS WITHIN 180 DAYS OF THE ACCIDENT CAUSING THE INJURY.
MR. BUNDY APPEALED THE INSURERS' DETERMINATION ON THE BASIS THAT HE HAD NEVER RECEIVED THE APPLICABLE CERTIFICATE OF INSURANCE, BUT AMEX UPHELD THE DENIAL OF BENEFITS BASED ON WRIGHT & CO.'S STATEMENT THAT IT HAD PROVIDED HIM WITH THE CERTIFICATE. MR. BUNDY ALSO PURSUED THE MATTER WITH THE CONNECTICUT INSURANCE CONSUMERS INFORMATION CENTER AND THE CONNECTICUT INSURANCE DEPARTMENT, CHARGING THAT THE INSURERS HAD VIOLATED TRUTH-IN- ADVERTISING LAWS. APPARENTLY, THE CONNECTICUT INSURANCE DEPARTMENT IS CONTINUING TO INVESTIGATE MR. BUNDY'S CHARGES.
MR. BUNDY CONTACTED AN OFFICIAL IN THE EMPLOYEE BENEFITS SECTION OF THE FBI TO COMPLAIN ABOUT THE DENIAL OF HIS CLAIM, BUT THE OFFICIAL APPARENTLY ADVISED MR. BUNDY THAT THE BUREAU HAS NO CONTROL OVER THE INSURERS OR THEIR POLICIES. ALSO, THE FBI ADVISED MR. BUNDY THAT IT WOULD BE REMOVING HIM FROM HIS POSITION BECAUSE HE HAD BEEN ON LEAVE WITHOUT PAY FOR MORE THAN 1 YEAR.
IN HIS CORRESPONDENCE ACCOMPANYING YOUR LETTER, MR. BUNDY CLAIMS THAT WRIGHT & CO. HAS DEFRAUDED HIM AS WELL AS OTHER SPECIAL AGENTS CLAIMING DISABILITY BENEFITS. HE QUESTIONS WHY THE FBI DOES NOT MONITOR WRIGHT & CO.'S POLICIES AND PAYMENTS, SINCE IT DEDUCTS THE INSURANCE PREMIUMS FROM AGENT'S PAY. ALSO, MR. BUNDY QUESTIONS WHETHER THE BUREAU HAS SUFFICIENT JUSTIFICATION FOR REMOVING HIM FROM HIS POSITION.
MR. BUNDY'S LETTER AND INFORMATION WE HAVE OBTAINED FROM THE FBI INDICATES THAT HE PAID THE PREMIUMS FOR HIS ACCIDENTAL DEATH AND DISMEMBERMENT POLICY THROUGH A DISCRETIONARY ALLOTMENT OF PAY AUTHORIZED BY 5 U.S.C. SEC. 5525 (1982). UNDER SECTION 5525, THE HEAD OF AN AGENCY MAY PERMIT EMPLOYEES TO MAKE ALLOTMENTS FROM THEIR PAY FOR ANY APPROPRIATE PURPOSE. REGULATIONS IMPLEMENTING SECTION 5525 LIMIT THE AGENCY'S ROLE IN DISCRETIONARY ALLOTMENTS, PROVIDING THAT EACH EMPLOYEE REQUESTING AN ALLOTMENT MUST AGREE THAT THE AGENCY "SHALL BE HELD HARMLESS FOR ANY AUTHORIZED ALLOTMENT DISBURSED BY THE AGENCY" AND THAT DISPUTES ARISING FROM AN ALLOTMENT "SHALL BE A MATTER BETWEEN THE ALLOTTER (THE EMPLOYEE) AND THE ALLOTTEE (THE INSTITUTION RECEIVING THE ALLOTMENT." SEE 5 C.F.R. SEC. 550.312(D) AND (E) (1986).
ACCORDINGLY, IN VIEW OF 5 U.S.C. SEC. 5525 AND THE IMPLEMENTING REGULATIONS, MR. BUNDY'S CLAIM FOR DISABILITY BENEFITS CONSTITUTES A PRIVATE CONTROVERSY WHICH HE MUST PURSUE AGAINST THE INSURERS. THE GENERAL ACCOUNTING OFFICE HAS NO AUTHORITY TO SETTLE MR. BUNDY'S CLAIM OR OTHERWISE INTERVENE IN THE DISPUTE.
ADDITIONALLY, WE HAVE NO JURISDICTION TO DECIDE WHETHER THE FBI'S DETERMINATION TO REMOVE MR. BUNDY WAS ERRONEOUS. THE RESPONSIBILITY FOR MAKING SUCH A DETERMINATION IS COMMITTED INITIALLY TO THE EMPLOYING AGENCY, AND THEN TO THE MERIT SYSTEMS PROTECTION BOARD. SEE MARJORIE E. OLSEN, B-209954, JUNE 7, 1983 (COPY ENCLOSED).
WE HOPE THAT THIS INFORMATION WILL ENABLE YOU TO RESPOND TO YOUR CONSTITUENT.